have a crystal ball. they'll beat the nats. those st. louis roots are hard to cut. they thrive there. i'm candy crowley, have a good week of baseball, politics, and anything else that catches your fancy. if you missed anything, head to youtube. fareed zakar"fareed zakaria gps >> this is fareed zakaria. welcome from all over. i'm fareed zakaria. the state economy. i was the topic of this week's presidential debate and be d deciding week of the election. we're often told we need to get businesses to start investsing and hiring. well, we have three powerhouse ceos on the show. lloyd blankfein, and john of cisco systems. next, 11 years after 9/11, do we have to worry about al qaeda

again? i'll talk to the former cia chief michael hayden about the aftermath of the benghazi attack. and on his decade in hiding after a threat was placed on his life. also, if china's growth slows, should the rest of us cheer? no. first, here's my take. the pundit dees claired mitt romney the winner. he was. obama seemed passive, detached, and glum. but what's more significant than how romney said things is what he said. romney repeatedly insisted he was not advocating a big tax kuchlt in fact, he declared unequivocally that he would not cut taxes at all if they added to the deficit at all. now, as "the washington post"

reporter checks out, for two years rom hi has been campaigning on a tax cut that would cost around $5 trillion over ten years. he said he would eliminate deductions and spending to pay for it. he never offers details. he did say he would cut funding for public broadcasting which was 0.01% in 2012. medicaid was 0.13%. romney also spoke in favor of regulations including much of the dodd/frank bill and he repeatedly held up as a model his health care plan in massachusetts which has added center the individual mandate and on which obama care is based. romney's transformation did not happen overnight. the candidate has been reworking his stuck stuck speech. he has a five-point stump

speech. the first four points are absolutely identical to obama's stump speech. 2, dough mess tech energy, 3, retraining programs, four, domestic. on five they differ. i've long argued that romney is an intelligent man trapped in a party that has forced him to embrace extreme and impossible positions. one of his advisers had predict thad once the republican primaries were over, romney would erase the image from the primaries and like an etch a sketch just draw a new one. well, he appears to be doing just that. the republican party might hate obama enough and be frus stratr enough to let him wink and do more. if so he faces something far more challenging than a good debate never the last weeks of the campaign. he faces a moderate republican. let's get started.

-- captions by vitac -- www.vitac.com america's biggest corporations have a unique per expect tifb on the economy. i recently had an opportunity to talk to the heads of three very different, very successful businesses if finance, in manufacturing, and in technology. when i chaired the panel for the clinton global initiative. they are lloyd blankfein the chairman and ce o o of goldman sachs. andrew live russ, the chairman and ceo of dow chemical and john chambers the chair manned and ceo of cisco. the conversation was fascinating. listen in. lloyd, let me start with you. when you look at the global economy, right now, you know, what is it, four years after the crash, what does it look like to you? >> well, we're definitely in a m

muddle-through phase, slow growth, very disappointing. but i think one of the things that was achieved -- and by the way, in hindsight it may look small but while we were living through it, it was very large. there was a substantial chance that things would fall off the rail. a lot of things that foster growth are still uncertain and are still, you know, frankly they're still in the forward. but i think what was taken off the table recently by the -- frankly by the central banks acting by themselves and less by government through fiscal policy was the real blow-up risk. so if you think of a couple places in the world that we were the most afraid of like europe, i think the actions of the ecb to at least defer the problems with the sovereigns and the bank issues in europe, if they use this time to fix the problems, we'll look back and think it's a good thing. if they were made worse, we won't feel that way. i think something similar has

happened in the united states whereby a lot of liquidity has been provided by the central bank. >> andreandrew, you have operat throughout all of the world. what's your sense of growth? there are troubling reports about growth slowing down which so far have been a very powerful lifeline for global growth as united states and if world have weakened, particularly china where do you a lot of business. >> i don't think we're going have an '08/'09 issue out there for the reasons lloyd was addressed. i do think the world since '08/'09 to now has not gotten to normal. of course, the obvious, which is consumption in the u.s., is not where it was. what's replaced that is government stimuli around the world that has been effective in the main. the first chinese one was very effective. the situation in china right

now, boy uld say, in the industrial b to b world, they're at, in my view, somewhere in the 2% range of growth. not 6%, not 7%. that's an industrial engine. thousands and thousands of small medias are having trouble. our supply chains are weak. and, of course, the slow motion train wreck that is europe and if i could be optimistic there, let's say they're on the rails again. they just need people to drive the train. maybe i can finish my run around the world with the one optimistic place that we should be thinking very positive about, which is the united states. we have a strong hand right now. our political process is not allows us to play it. capital is a coward. businesses hate uncertainty. we have uncertainty even in this country on things that matter. not the least of which being our phenomenal energy position, which i can talk about more, if you wish. maybe the u.s. can get its act

together, depending on whoever the president is and the businesses can work together to finally get things going. >> when it turns to technology, the hope is that somehow you guys will magically bring us out of all of this, that technology is going to be the thing that gets the american economy moving again. if we are to look for the next drivers of growth, do you see them in technology? >> i absolutely do. and if you really look at the opportunities, yo go around, at least my colleagues do. if you look at europe, you do not only see the weakening economy krks but we also said in our last reports, the spending on capital drops a lot, same with the job creation. i do not think asia-pacific will be as aggressive. >> i've been in china for 25 years.

they always find a way to get through. unfortunately it has to be the country that leads out this time. we just do not see the engines in other places. but i think technology combined with a great education system and government and business really working together and i thinks this is what we're missing around the world, a model leak as what occurred in the uk or canada or russia might be something we can learn from, but i believe it's the u.s. leads us out. >> wait. follow up on that. you say government business cooperation is what we need. the kind we have in the united kingdom, in canada, and even russia, you find it easier to deal with putin's russia than the united states? >> you are a pro at this and so no matter which way i answer this, i'm in trouble. to that point, each of those leaders understand technology. each of those leaders know if you're an extraction leader live

russia, you've got to create stabili stability, keep your young people at home. >> so how badly did we do in the u.s.? when you can contrast your dealings in washington with your dealings in lawn and canada and russia, what's your conclusion? >> i think we have a country that dreams well. i think we've got to be more positive in our execution. >> any time you feel down, go to silicon valley. they make dreams happen. but there's a risk-taking culture that you must have to be successful in countries an companies. >> we'll be back in a moment. more with these three top ceos, their optimism and pessimism about the future. right back. [ male announcer ] citi turns 200 this year.

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...and we inspected his brakes for free. -free is good. -free is very good. [ male announcer ] now get 50% off brake pads and shoes at meineke. now, more of my panel with lloyd blaine fining of gold panhandle sax, andrew live rirs of dow chemical and john chambers with cisco. how does the future look to them? >> lloyd, the biggest immediate danger is the so-called fiscal cliff. >> mm-hmm. >> how real is it, and how do you prepare for something like that? >> you know, it's real. i mean the number is there and the law is cast, and the math the economists have defined and this seemed to be the consensus, this can be 4% of gdp, think it

was meant to be somewhat of a ticking time bomb to prompt action. i don't think anybody is going to be pleased if it doesn't produce action. people have written off the election and put their faith in lame-duck session to do some work. maybe at the most optimistic there can be some rejiggering, rearranging, redeferring. but if they got something done, medium hanging fruit and then said we have a structure in place and maybe by the middle of the year we come up with a whole program and set ourselves a deadline and agree to work together -- and i'm somewhat optimistic of after the elect n election, people who have been pouting for 18 months and holding their breath aren't going to do want to do that for the next four years. there will be some confidence moving that out. this gives me optimism.

you know, this wasn't supposed to be -- the timer was set. it with us supposed to prompt action. there is a substantial risk that we won't get action. that will be very, very bad for the rating. it won't be just because of the credit. it will be because of the did functionality of the government and we will deserve to be graded as a dysfunctional government and who wants to lend money to a dysfunctional government and why should we bethe reserve currency of the world if we can't manage the health of the company and therefore the value of the k currency is. u.s. is afternon amazing benefi. think people should realize that's the ticking time bomb. >> andrew, you operate around the world. would you say the dangers or the problems of indeveloping vesting can tall in the worlds have gotten worse? >> they're in a stormy period where the voice of business needs to elevate to meet the

voice of government and do it as a partner. i think it falls on us. when i'm in front of our factory workers and they talk about the pride thanks to american entrepreneurial richl and ien ovation, i'm not an american but i think this country has nailed it. so we should allow ourselves some faults. we should allow ourselves to dialogue and not be afraid and not come plain it's just politics. equally politics has to get way i from this notion that we have a four-year or three and a half-year election process, which is a joke. a whole year, this year of doing nothing, which is, in essence, what we've got. we've got reports, lots of work on the financial side all sitting there in inaction. of course, we can't get the white house and the congress to agree on fixing the problems of

the day. >> you're on several of president obama's -- >> i'm on several of those. i look at me when i saw all this. >> what was your thought on president obama? >> is this going to get me depo deported? >> look. we serve this country. we serve this president. i'm proud to serve this president. if it's the same president, great. >> john cham bers, you have lavished praise on president clinton. >> it's hard for a republican. he's done the best job during my lifetime. >> goldman sachs was the largest contributor to obama's campaign the last time around. i'm guessing that's not the case this time. has that surprised you?

why has support for president obama dropped so dramatically in the financial community. >> just to clarify, goldman sachs doesn't contribute to the campaign. >> individuals within them. >> we're a mixed bag. we were also a big contribute to republicans four years ago and the democrat this year. i tlifrpg's certainly been a shift. there's been a disappointment owing to some of the things that have been described and working together. you knee, risks are not just the risks we take. the environmental is such a "got you" environment even the regulators have to do their business with one eye over the shoulders for fear of being dragged over the national committee and having to be skboesed to talk to leaders. i think in order to allow people to work together, there has to be a little bit of a let-up.

another thing is you can't kill people if everything doesn't work out properly. who the heck is going to take the job whether in business or otherwise. it might not be the people you want if you make it so punishing for them to take the job and so unsustain tobl be in the job because who gets it right all the time? >> that's actually an important distinction. john chal bers and i wither talking about it. in business, you asigh you take risks. some of them work out. some of them don't. in government, it's very difficult to take risks because if something goes badly, you're goingo get pilleried for it. the balance that you worry about is very different, right? >> it is.

business has an advantage that we know if we don't take risks, there's low chance of survival. those who were there 15 years ago, they're not there. if you don't change, you will hurt your employees, you will hurt your customers and your shareholders. think also they have to stand behind our government leaders who take risks and encourage the country and everybody around the world if they don't take risks, thichlg that's what it's all about. in order do that you gievet to take risks. the chinese would take risks. i would ask that we do that here. >> since i have you here, john chambers, i'm going to ask you what everybody is wondering. if you're watching on the

internet, how is the system not going to collapse. give us a future of it -- >> you haven't seen anything yet. the majority of video you will consume five years ago will be user created as opposed to content related. we did one that sold a billion. we sold 6,000. if you get excited about that, you haven't seen anything yet. you look at what could happen if you connect the unconnected. and you begin to do this not just through video, but through common capability. in a plant, 50,000 devices. thing what would happen if you could bring your loans out in a very unique way. back to a plug for president clinton which he does not need. he was the champion of the internet. he got how important it was to

lead with this concept in 1992. he was the best spokesperson. >> no al gore? >> he helping a little bit. >> all right. you haven't seen anything yet. that's good optimistic note to end on. thank you very much. >> thank you. up next, "what in the world." why some bad news for china is really bad news for many other parts of the world. i'll skplachblt tdd#: 1-800-345-2550 let's talk about low-cost investing. tdd#: 1-800-345-2550 at schwab, we're committed to offering you tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest tdd#: 1-800-345-2550 operating expenses tdd#: 1-800-345-2550 in their respective tdd#: 1-800-345-2550 lipper categories. tdd#: 1-800-345-2550 lower than spdr tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and even lower than vanguard. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that means with schwab, tdd#: 1-800-345-2550 your portfolio has tdd#: 1-800-345-2550 a better chance to grow. tdd#: 1-800-345-2550 and you can trade all our etfs online, tdd#: 1-800-345-2550 commission-free, from your schwab account.

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. now for our "what in the world" segment. for the last few weeks we've been getting bits and pieces of news that add up to something big. china is slowing down dramatically. if it continues, it will have a profound impact on the rest of the world. gdp growth has dropped from about 107 last year to 7.6% in the latest quarter. now that might not sound like much, but it might just be the beginning like a dropping ball. we don't know if china has hit

bottom yet. what we do know is that it will have widespread effects. look at two charts. the first is from brazil since the 1990s. the line in red shows how brazil's gdp has fluctuated around an average of 2.5%. now look at the blue line showing commodity prices. the correlation is pretty stark. when commodity prices rise or fall, the others move accordingly. the same in africa. these prices in turn will increasingingly track with china's growth. china imports these commodities. australia used to be called the lucky country. prices of iron ore are down. china's unprecedented rise has brought with it a boon for

resource-rich countries. as china's growth slows, the economy is going to slow down. it says the u.s. exports to coal used in steel making grew six-found in 2009. six fold again in 2010. 600% rises but as the steel industry face as loss this year, demand for u.s. coal has slowed oopds. that's triblted for layoffs for hundreds of coal miners in the state of west virginia. thousands of miners will have theirensions and health benefits reduced. all of these ripple effects lead back to china. to give you a sense of its important, look at the market for metals. according to the world bank, china's con suls of refined metals has jumped 17 times since 1990. tl share haas jumped from 5% to 41%.

over the last decade, china's demand has been growing by 15% a year, the rest of the world has remained constant. china has essentially fueled global growth in these markets but now that china's appetite is waning commodity prices will fall, indeed are dropping. oil prices dropping as well. china represents 10% of the world's crude oil but over the last decade, it's contributed to nearly half o the global rise and demand. according to morgan stanley, china's appetite for oil has been increasing by 8 a year, this year it's growing just a third of that amount, 2.5%. now, if this slowdown is indeed the new normal for china as many economists suggest, it has immense ramifications. all of these countries that use it to balance their budgets, they're all going to struggle. i don't mean to paint a picture of doomsday. dy spite china's slowdown, it

will continue grow more moderate. it's a rabid rate for what is now a very large economy, but it will mean the party is over for many countries and countku comp around the whole world. lots more ahead. i el hear what it was like living under a war for a decade. up next, i'll speak with michael hayden. the former director of the cia. right back. [ male announcer ] alka-seltzer plus presents the cold truth. i have a cold, and i took nyquil, but i'm still stubbed up. [ male announcer ] truth is,

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have more fiber than other leading brands. they're the better way to enjoy your fiber. washington. fareed zakaria will be back in a moment, but first a check of the top stories. seven people are con filled dead from an outbreak of fungal meningitis. 64 cases of the illness are now confirmed in nine states. the outbreak is linked to contaminated steroid injections. the pharmacy responsible for making the steroid has recalled all of its products nationwide. voting in venezuela's presidential election is under way. the incumbent hugo chavez is hoping to fend off a challenge who is considered a moderate alternative to the left of chavez. hue glow chavez has been in power for 13 years. >> at least 1,400 pastors across the country plan to take on the

irs today. they plan to be making political endorsements from the pulpit which is illegal for churches who receive tax-exept from the government. is al qaeda back? there are signs that an affiliate of the terror group played a role in the benghazi attack that killed ambassador stevens last month. how mump do we have to worry about? michael hayden has run the u.s. intelligence agency under three presidents. he was appointed by bill carolina tochb and was in that post on 9/11. george w. bush later named him cia director, a job he left 23 days after obama came into office. he's now an adviser to the romney campaign. welcome back to the show,

general hayden. >> good morning, fareed. thank you. >> there are two possibilities, one, that this is a bunch of bad guys, militants, that got lucky. the other is this is a systematic campaign perhaps directed by one of the major al qaeda affiliates, if not al qaeda central. you know, this is, in fact, a -- you know, the execution of a long planned attack against the united states. which do you think seems more plausible? >> well, fareed, this is all fuzzy and it's just not fuzzy in our analyst. it's fuzzy in real life. if you look at al qaeda, i'll give you three tears. you gievet al qaeda prime still in pakistan and the border. i think we both agree they are not what they used to be an probably never will be. then you've got the al qaeda affiliates in the arabian pence will and then the al qaeda inspired. frankly, i think this attack was

conducted by a group that's on the edge between those second and third tiers. consistently inspired, probably not quiet quite a formal affiliate of al qaeda. and i think that's the new normal. that's what we're going to see an awful lot of. and so what we're going to see are attacks of this nature in many areas of the world against americans and american interests, but al qaeda's ability to pull off what they doctrinely really want to do, the mass casualty attack in the home lands against the iconic target. well, the probability of that now is very, very low because of what we've done over the last 11 years. >> when you look at these kind of al qaeda affiliates, and as you say, what you're describing, it's like they take the al qaeda brand. >> right. >> as opposed to having any kind of central office of al qaeda, but when you look at these kinds of groups, does it worry you that what does seem to be a band

of militants was able to attack an american government target? this has been something, again, they haven't been able to do really since -- certainly since 9/11, and if you go back to the attacks on our embassies in africa before that. why were they able to do this to an american -- a government building? >> well, fareed, i think of all the places on earth you could point to for ail die da and western interests, ben ga z is really a home game for al qaeda. tight home of the islamic/libya fighting grew. islamist militants have be there for a long time. they september more fighters to iraq more than any other country during the war there. this part of libya is not under strong government control, and so in one sense, if this wasn't predictable, at least one can look at the circumstances and s say. >> i think what the dynamic is

one thing that strikes me is that the difference this time around with some periods in the past is that you have an elected government in libya that has legitimacy as a result, that has not only denounced the attack but come out very strongly in support of the united states, seemed very determined to track down these people. you have an elected islamic government in tunisia denouncing the ail die da attack. you have an elected official in egypt denouncing the attack. not as eloquently as we would have liked, but he did it. an elected government. in other words, for your the first time you have a lot of people with street credit in the muslim world and in the islamic world saying, you know, this is bad, this kind of violence in the name of jihad is a terrible thing. does that change the dynamic, you think. >> yeah. it really does, and this is a really important point, fareed. it's both good news and bad news. let me quickly cover the bad

news, all right? all the successor governments are weaker therein predecessors, and frankly, they're less a jail and adept counterterrorism partners for the united states. that's just a fact. this would not happen in a libya under moammar gadhafi. we've been very successful with american men would call a close battle, dealing with a jihadi that is already convince they'd want to kill us. we have not been involved in the deep battle, that 's the production rate of them wanting to kill us in a year or five years. despite all the turbulence that this arab awakening that has created, it's set in motion a dynamic, it gives us the possibility -- this is not a sure thing -- that we can begin to have some influence on the deep fight, you know, the

production rate of these folks who in a year or several years' time will be convince they'd want do us harm. it's very difficult, success is not guaranteed. but for the first time in 11 years, i actually have some hope about the deep fight. >> always a pleasure to talk to you. thank you so much. >> thank you fareed. we'll be back. >> everyone who loved me, said what the hello are you doing? have you lost your mind? i thought, you know, actually. maybe, actually.

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how do you live knowing that the world's most powerful islamic cleric want use dead?

salman rushdie lived under a threat of being killed. it's all because of a book he wrote, "the satanic verses." did you think you were going to die? >> at the very beginning of it, yeah. almost certainly because i knew the nature of the beast, you know. i knew there had been assassinations carried out in europe of the supposed opponents of the regime. they saw it as a lemg mat extension of their rule. >> and you couldn't have imagined that you would get, i'm guessing, the kind of protection that would allow you to be safe. i had no idea what i would get if anything. the whole thing was unimaginable. it put me in a position where i literally didn't understand the shape of my life anymore and then i thought there probably isn't much more of a shape of a

life anymore. >> people didn't know quite what to do. this was one of the first episodes of this kind of it. there wasn't very strong support. even margaret thatcher was somewhat ambivalent? >> to be fair to the conservative government, they did support the police offer of protection and that was maintained throughout the period, you know, so, yes, sort of bedrock level. they did do that. but i mean it was well known that i had not been a supporter of the conservative government, you know, and i had written sort of sa tearicly about it often and nonsatirically. i had written op-eds a lot. a lot of it was in the satanic verses so it wasn't a novel that endured itself to the then ruling group and they thank

maybe somewhat reduced their energy to solve the problem. >> like margaret thatcher never made a ringing speech about -- >> no she didn't. some of her senior cabinet ministers said extremely rude things about me. douglas hurd who was then the foreign secretary gave interviews in which he said was i was a very unpleasant person which i don't know how me knew because he never met me. i mean i literally never met him. he was prepared to say that. i remember there was an interview and he was asked what was your most painful duty in office and he said reading "the satanic verses." >> i heard you got a bad review. >> from one of the crapiest authors on earth. another said -- i've never forgotten it -- the british people have no love for this

book. it compares britain to nazr germany whi nazi germany. it's true 80s not polite about the thatcher government but that's a little boift a step away from comparing it to the nazis. >> talk about the period when people prevailed upon you to make an apology. i can understand the pressure. you know, if somebody says to you, look, if you say this, it will all go away, describe what you were thinking. >> there was that. that was the carrot if you like. there was also the stick, which is that a lot of people in the british media and public spokespeople, commentators in the newspapers and politicians were essentially saying, you broke this, you fix it. so i allowed myself to be suckered into this compromise, you know, in which i was supposed to make some

declaration of adherence to the islamic face, which i did, and it wasn't trurks first off because i've never been a religious person. i wasn't then. i'm not now. so it was the one time, i think, that i really agreed to, you know, sort of push myself into a position of telling a lie. for a good motive, to try and solve the problem. >> but it didn't work. >> a, it never worked and, b, it did something else. it disgusted mooichlts my body knew it. i came out of the meeting and i was physically sick and everybody who love med said what are you doing, have you lost your mind and i thought, you know, maybe actually. maybe. but in a way i've about come to thing of that book as a pivotal moment, not just in that story, but in me, my life, my character, because when i, you

know, came to my senses and repudiated what i said and apologized for having said it, you know, i regained my honest self, if you like, it also had clarified something for me, you know. it really made me feel you're never going there again. enough with compromise, apology, appeasement, you know. enough with giving in with letting this other side set the agenda, you know? i know what i believe in. i know what i'm standing up for, and i'm just going to do that from now on and if you don't like it. tough. it gave me that kind of strength and purpose. what all novelists know is crisis gives people character. you shipwreck them. you find out what they're like. this was a moment like this. it was a kind of a shipwreck and i find out what people were really like because they were obliged to reveal themselves. >> salman rue she, grade to have

you on. great book. we'll be right back.

despite president ma'am mood ahmadinejad last week that iran's economy was not in chaos, there was chaos this week when shop keepers posted the real. it meant anybody with $25 to their name was a millionaire in iran. that brings me to the question of the week. what is the largest denomination currency note ever issued? is it, a, 500 yugoslavian denar,

b, 100 trillion zim back wi, c, 100 quintillion hungry, d, 100 sex till onsomalia schillings? stienld. we'll give you the answer. go to itunes. you can get the audio podcast for free or buy the video version. itunes dash slk fareed. this week's book of the week, the parties versus the people. if you worry about partisanship, the gridlock and breakdown of the american system, kblouft read this book. edwards doesn't just wring his hands. he has series of smart proposals that will pull america off the ledge and give politicians the incentive to make america work. now for the last look. posed lie chess pieces around the avenue of the reform of mexico are monument after monument, some to local heroes,

there's the last as tech ruler, some to world leaders, here's gandhi, christopher columbus, abraham lynn come, and the latest statue to go up is high daf hue lee daf. that's what others are asking. he was the leader of the central asian pet trow state until he died ten years ago. his son who is currently the president spend $5 million of his nation's oil riches to rebound some mexico city park. ice called the park and that's where the statue sits. if you take a look at the map you'll see that while this is the first statue of him, similar star tus have concurred much of eastern world and in asia. perhaps this one is coming to a park near you. the correct answer to our gps challenge question was c,